GM in "intense" bankruptcy prep: source
12:35 PM Tue, Apr 07, 2009 | Permalink
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NEW YORK/DETROIT - General Motors Corp is in "intense" and "earnest" preparations for a possible bankruptcy filing, a source familiar with the company's plans told Reuters on Tuesday, according to Reuters. A plan to split the corporation into a "new" company made up of the most successful units, and an "old" one of its less-profitable units, is gaining momentum and is seen as the most sensible configuration, said another source familiar with the talks. If the plan goes through, the new GM is expected to assume some previous creditor debt from bankruptcy proceedings, such as secured debt, said the second source, adding that GM bondholders are likely to lose substantial value in bankruptcy. Certain GM dealer and litigation claims would also be hurt if the new company structure is used as part of a company bankruptcy, said the second source. The sources asked for anonymity, saying they were not authorized to speak on the record. 
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